Boat Insurance: What is the difference between ‘Market Value’ and ‘Agreed Value’?

When you obtain an online boat insurance quote, you are asked to enter the boat’s value which should reflect what it would cost you to put yourself back in the same position in the event that the boat is a total loss (i.e. owning a similar boat of a similar condition with similar features, equipment etc.)

Depending on the type of boat involved you may also be asked to select a ‘Valuation Basis’, and there are two options available:

• Agreed Value: If you select this option the maximum amount that would be payable in the event of a total loss of the vessel would be the vessel value which you have chosen. Thus, if you had selected a value of £50,000, that would be the maximum amount payable.
• Market Value: If you select this option, the maximum amount that would be payable in the event of a total loss of the vessel would be the lower of the market value of the vessel at the time of the loss or the vessel value which you have chosen. Thus, if you had selected a value of £100,000, but at the time of the loss the market value of the vessel is only £80,000, then £80,000 would be the maximum amount payable. As the amount payable by the insurer on market value cases may be lower, there is usually a lower premium if selecting market value rather than agreed value as the valuation basis.